London. Standard Chartered PLC (the Group) announces that its wholly owned subsidiary Standard Chartered Bank (SCB) and its partner PT Astra International Tbk (Astra) have agreed with Bangkok Bank Public Company Limited (the Purchaser) to amend the terms of the agreement announced on 12 December 2019 (the Transaction) to sell their aggregate 89.12% equity interest in PT Bank Permata Tbk (Permata).
The Purchaser has received approval for the Transaction from its shareholders. Permata’s shareholders are expected to approve the acquisition plan at an extraordinary general meeting scheduled for 23 April 2020, at which both SCB and Astra are entitled to vote their respective 44.56% shareholdings. The Transaction remains subject to certain conditions, including necessary approvals from the regulatory authorities in Indonesia.
The parties to the Transaction have agreed to revise the purchase price from 1.77 to 1.63 times Permata’s shareholders’ equity as at 31 March 2020, subject to the Transaction closing on or prior to 30 June 2020.
FINANCIAL IMPLICATIONS TO Standard Chartered OF THE TRANSACTION
The latest estimated consideration payable to SCB in cash is approximately IDR17 trillion (US$1.06 billion) being approximately US$0.3 billion greater than the Group’s carrying value. The 18% reduction in estimated proceeds compared to that indicated on 12 December 2019 is attributable to the revised valuation multiple, a reduction in Permata’s shareholders’ equity due to the adoption of IFRS 9 and the recent depreciation of Indonesian Rupiah against the US Dollar.
The Transaction would generate, on the basis of the Group’s financial results for the period ended 31 December 2019, an increase in the Group’s Common Equity Tier 1 capital ratio of around 40 basis points, reflecting a reduction in risk-weighted assets of around US$9.1 billion and the deconsolidation of US$0.5 billion minority interest equity (net of regulatory adjustments including goodwill).
The impact of the Transaction will be included in normalised items to determine the Group’s performance. As the Transaction is expected to close at a future date, the actual consideration and the actual Common Equity Tier 1 capital impact will be determined at completion.
Note: In this announcement, the conversions of IDR into US$ have been made at the rate of IDR15,800 to US$1. Such conversions are for reference only and should not be construed as representations that the IDR amount could be converted into United States dollars at that rate.
Mark Stride, Head of Investor Relations +44 (0) 20 7885 8596
Julie Gibson, Head of Media Relations +44 (0) 20 7885 2434